The recent stand-off between the Enugu State Electricity Regulatory Commission (EERC) and the Nigeria Electricity Regulatory Commission (NERC) brought to fore crucial issues to smooth operations of the market which needs urgent attention.

In a pioneering move, EERC issued new tariff regime for consumers in the state, effectively putting to test the Electricity Act 2023, which decentralized and removed the previous restriction limiting participation of federating states on the electric power sector, in their respective jurisdictions.

The Enugu Commission’s Order No. EERC/2025/003 entitled “Tariff Order for MainPower Electricity Distribution Limited” (the utility firm that succeeded Enugu Electricity Distribution Company (EEDC) for electricity distribution in the state), reviewed electricity cost for Band A from N209/ kWh (per kilowatt hour) to N160.4 kWh, effective from August 1, 2025. It froze the various tariffs in Bands B, C, D, and E.

It predicated its action on the Enugu State Electricity Law 2023, which empowers it to regulate activities of operators in power generation, transmission, and distribution in and exclusively for the state.

Enugu Commission’s impetus arose from the provisions of the Electricity Act 2023 signed into law by President Bola Ahmed Tinubu on June 8, 2023, which replaced the Electric Power Sector Reform Act 2005. The new law amended the Constitution of the Federal Republic of Nigeria and the Electricity Act 2023 paragraph 14(b) of Part II, that is, the Concurrent Legislative List, effectively providing for the orderly transition of powers over intra-state electricity market from the Federal Government of Nigeria to subnational institutions.

The NERC rejected the EERC Multi-Year Tariff Order, stating that state governments lack jurisdiction over the national grid or over electric power stations established under federal laws or operating under licences it issued. It also advised state governments to reflect the wholesale costs in tariffs or be ready to pay subsidies for any tariff shortfall.

NERC also warned against distortion of the “wholesale generation, transmission, and legacy financing costs in the Nigerian Electricity Supply Industry” (NESI) which was fully decentralized with the Electricity Act 2023. Meanwhile, under NESI, NERC transferred regulatory oversight over intra-state electricity markets to Edo, Ekiti, Enugu, Imo, Kogi, Lagos, Niger, Ogun, Ondo and Oyo through regulatory institutions established by those states pursuant to the provisions for orderly transfer of regulatory oversight specified in section 230 of the EA.

Similar regulatory oversight will be transferred soon to Plateau, Abia and Delta.

The regulatory agency, on July 24, 2025, noted: “States that have assumed full regulatory oversight over their intrastate markets are now authorized to create and regulate transactions in their state electricity markets within the confines of powers granted to them by the Constitution, the EA and their enabling law; and this extends to the development of tariff methodologies that shall apply to end-use customers in their respective states.

“As states do not have jurisdiction over the national grid and over electric power stations established under federal laws/operating under licences issued by the Commission; they must holistically incorporate the wholesale costs of grid supply to their states without any qualification or deviation in their design of tariffs for end-use customers in order not to distort the dynamics of the market or be prepared to make a policy intervention by way of subsidy for any deviation in the tariff structure that distorts the wholesale generation, transmission and legacy financing costs in NESI.”

But EERC Chairman, Chijioke Okonkwo, countered NERC, saying that by paragraph 13 of Part II of the Second Schedule to the Constitution, National Assembly is restricted to making laws concerning the generation and transmission of electricity in or to any part of the federation and from one state to another state, “electricity distribution was deliberately excluded.” It added NERC regulation of electricity distribution in Nigeria is a legacy of the centralised electricity market operated in Nigeria prior to the constitutional amendment in 2023 and the Electricity Act 2023.”

Daily Trust believes that what is at stake is the proper interpretation and implementation of the spirit of federalism as contained in the new electricity sector reform law which involves the transition of regulatory oversight of intra-state electricity markets from NERC to state-level bodies as represented by EERC. Enugu is just a metaphor of the fight between proper decentralization and maintenance of status quo.

Therefore, we call on the Minister of Power, to summon the political will and convene a high-level mediation session involving NERC, Distribution companies (DICOs), Energy Commission of Nigeria and other key stakeholders to work out the orderly transition of powers as envisaged in the new law.

This means working out how the states who took over the control of the distribution of electricity within their entities could operate in line with the provisions of new Act. The aim should be to find ways where it is possible to reduce the burden of the customer without jeopardising supply and distribution of electricity to Nigerians.

In line with this, Daily Trust also calls for joint and urgent efforts to review and harmonize tariff-setting methodologies to ensure they reflect both federal subsidies and local economic realities. This will reduce tensions and set the stage for collaboration that addresses Enugu’s goal of easing consumer burdens while deliver affordable and reliable electricity.

We urge federal institutions in the electricity sector to use the Enugu’s pioneering role in sub-national electricity regulation as template to implement Nigeria’s decentralised energy future as intended in the new law.

We also challenge the Enugu State government to explore its abundant coal resources as a source of electricity generation. (Daily Trust Editorial)